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Judge: FAA lacks power to ban commercial drones

JackNicas

Industry efforts to open up U.S. skies to drones are gaining momentum on both the legal and regulatory fronts, but the controversial issue isn't likely to be resolved soon.

A ruling by an administrative law judge on Thursday held that the Federal Aviation Administration lacks clear-cut authority to ban the commercial use of drones in the continental U.S. The decision, which can be appealed to the full National Transportation Safety Board as well as a federal judge, is bound to complicate the FAA's already challenging job of crafting policies and regulations to oversee the nascent industry.

Separately, escalating industry demands for action have prompted FAA officials in recent weeks to begin looking for ways to authorize expedited but limited commercial uses of small drones in U.S. airspace.

The FAA effectively has banned the commercial use of unmanned aircraft over the U.S. airspace until it develops rules to integrate them into the national airspace--a process that is expected to take until 2015 even for the smallest unmanned vehicles operating in isolated areas. More comprehensive rules covering larger models are likely to take years longer to complete.

Commercial-drone use has been taking off abroad and many U.S. companies and drone manufacturers have been frustrated with the FAA's stance.

Recently, however, the FAA's hard line on commercial drones appears to be eroding. The agency is considering case-by-case approvals or waivers for certain commercial uses of drones, including in the agriculture and film industries, before it completes broader rules for small unmanned systems, according to government and industry officials and lawyers involved in the discussions.

Thursday's ruling threatens to toss a wild card into that process, and could upend the FAA's current plans. In 2012, the FAA fined a pilot $10,000 for remotely operating a roughly five-pound drone to film the University of Virginia campus, saying he operated it recklessly. The subsequent challenge raised a host of questions about legal distinctions between model aircraft and unmanned aerial systems. Some of those unresolved questions are likely to be debated further by lawyers, federal regulators and state officials.

Administrative law judge Patrick Geraghty struck down the fine, ruling in part that the FAA's de facto ban on commercial use of drones, based on a 2007 policy statement, "cannot be considered as establishing a rule or enforceable regulation." He determined that "policy statements are not binding on the general public."

A spokeswoman for the FAA, which has widely used "policy statements" and "advisory circulars" over the years to enforce important aircraft safety requirements, said agency officials were reviewing the ruling.

Some lawyers and drone users have argued for months that the FAA has no statutory power to enforce its prohibition of commercial-drone use. At the very least, the ruling is likely to provide an immediate boost to manufacturers and would-be commercial operators seeking to introduce small unmanned aircraft flying at low altitudes.

Brendan Schulman, the lead attorney on the appeal of the FAA's fine, said if the ruling stands it would preclude the agency from enforcing its current prohibition.

"I view the decision as a victory for technology," said Mr. Schulman, a New York-based attorney with Kramer Levin Naftalis & Frankel LLP and a recreational drone user. "For seven years our federal government has told business people and entrepreneurs that they must stop using drones for commercial purposes, and I think that's had a very negative effect on this really exciting emerging high-tech industry."

Leading up to Thursday's ruling, industry officials believed they were making slow but steady progress persuading the FAA to be more flexible.

"The tone has shifted," and the issue "is finally starting to get the attention it deserves at the highest levels of the FAA," said Ben Gielow, general counsel of the Association for Unmanned Vehicle Systems International, a trade group. Allowing small drones in some industries "would release a pressure valve" for pent-up industry frustrations, he said.

The FAA, which began working on rules for drones in 2009, had taken a firm stand against allowing any interim commercial operations in the mainland U.S., reflecting opposition to waivers or case-by-case exemptions before initial formal regulations were in place.

FAA Administrator Michael Huerta told Congress in January that the agency's current regulatory structure for drones--which already permits uses of drones in strictly defined airspace by an array of government and academic operators--"is not sustainable long term." He indicated that the FAA is weighing whether to allow some commercial drones soon through case-by-case approvals similar to those granted to governmental entities, or through comprehensive regulation. "Finding that right balance," he said, "is a key part."

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